Kempen Lux Euro Credit Fund - Class I

Profile

Kempen International Funds SICAV - Kempen (Lux) Euro Credit Fund (the Fund) invests primarily in credits that have an investment grade rating (of minimal BBB-) and are denominated in Euros. The Fund may invest a small part in credits that are not included in the benchmark. The benchmark, the Markit iBoxx Euro Corporates Index, only includes bonds with an investment grade rating.

The Fund aims to earn a higher total long term return than the benchmark by implementing an active investment policy. In order to achieve this, a diversified portfolio is constructed and investment risks are continuously monitored. Investments are selected on the basis of extensive analysis of the terms and conditions of the bond issues.

In the interest of the shareholders it has been decided to soft open the Fund as per 28 June 2018. As per June 2018 the Fund will continue to accept daily inflow below EUR 10 million from all investors. For investments greater than EUR 10 million please contact the Fund’s relationship manager. Redemptions will still be possible. More information about the soft open can be found in the Notice to shareholders in the tab Documents.

Management team

Alain van der Heijden, Rik den Hartog, Harold van Acht, Sipke Moes, Luuk Cummins, Pim van Mourik Broekman, Quirijn Landman

Performance per 2018-06-30 (rebased)

No chart data available

Performance per 2018-06-30

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  Fund Benchmark
1 month -0.0 % -0.1 %
3 months -0.1 % -0.3 %
This year -0.5 % -0.7 %
2015 0.0 % -0.7 %
2016 5.1 % 4.7 %
2017 2.4 % 2.4 %
1 year (on annual basis) 1.3 % 1.1 %
3 years (on annual basis) i 2.8 % 2.4 %
5 years (on annual basis) i 3.7 % 3.2 %
Since inception (on annual basis) i 5.6 % 4.5 %
On 20 June 2013, Kempen Euro Credit Fund (KECF) was merged with Kempen (Lux) Euro Credit Fund (the Fund). Up to July 2011 (start of the Fund class I) the performance graph and performance table show the performance of KECF. The average annual TER for the period of April 2008 till June 2013 is 0.92%. Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future.
More information can be found on the documents page of this fund

Key figures

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Total fund size
EUR 1,690.94 M 2018-06-30
Share class size
EUR 718.13 M 2018-06-30
Number of shares
513,714 2018-06-30
Net Asset Value i
EUR 1,401.78 2018-07-17
Morningstar rating â„¢
Morningstar Analyst rating
Silver

Fund characteristics per 2018-06-30

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  Fund Benchmark
Number of holdings 257 2256
Duration i 5.3 5.1
Yield to maturity 1.1 % 1.3 %
Weighted rating A BBB+
Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Market developments per 2018-06-30

In June, the spread on the iBoxx Euro Corporate Index widened by 4 basis points to 136 basis points above the government bond curve. The index earned an absolute return of -0.05%. German 10-year government bond yields closed June at 0.30%, a decline of 4 basis points compared to the end of May.

The ECB has announced that it will reduce it CSPP bond-buying programme from EUR30 billion to EUR15 billion per month starting in October, with a further reduction down to zero as of the end of this year. Interest income and proceeds from redemptions stemming from the bond portfolio the ECB has already built up will continue to be reinvested. The ECB will not raise interest rates until half way through 2019 at the earliest. The latter announcement was a surprise to the market and contributed to the slight decline in German 10-year government bond yields. Other developments that contributed to this were the political squabbling within the German government on immigration policy and signsthat the previously highly robust European economy is weakening.

Bonds issued by companies operating in the auto industry performed especially poorly in June. This was primarily due to US President Trump’s threats to levy taxes on vehicles imported from Europe. A profit warning from German car manufacturer Daimler exacerbated the situation. Bonds issued by companies operating in the basic resources sector were also adversely affected by the growing threat of a trade war and the potentially negative impact this could have on economic growth and demand for metals and commodities.

Spreads on corporate bonds were also negatively affected by the generous premiums companies were forced to pay compared to outstanding bonds in order to place new bonds in June. The payment of such premiums seemed to be a prerequisite for companies to be able to issue new bonds. Yet even these generous premiums were not always enough to ensure a successful bond issue. Polish real estate company EPP, for instance, had to withdraw an announced bond issue due to the lack of demand among investors.

The supply of new bonds was EUR31 billion in June, about 22% lower than in May and down approximately 28% compared to a year ago. Non-financial sector companies issued new bonds worth EUR25 billion last month, while financial sector companies issued EUR6 billion in new bonds. Bonds worth EUR234 billion were issued in the first half of this year, a drop of about 12% compared to the same period last year.

Portfolio developments per 2018-06-30

During the month the portfolio’s sensitivity to market trends varied between 98% and 103%. The portfolio therefore held a relatively neutral positioning in terms of market risk.

Our positioning in the banking, healthcare and auto sectors performed relatively well in June. In contrast, our positioning in the oil & gas, industrial goods and basic resources sectors contributed negatively to the return. Our liquidity position (in the shape of cash and government bonds) had a positive impact.

At individual company level, positive contributions came from the overweights in Bayer, Groupe Bruxelles Lambert and Iliad, as well as from the underweights in Generali, Daimler and Deutsche Bank. In contrast, the overweights in OMV, EDF, NN Group and Glencore contributed negatively.

In June, the fund participated in new bond issues by e.g. Carrefour, Groupe Bruxelles Lambert, OMV (subordinated), JAB Holding, Bayer, KBC, Volkswagen (subordinated), Vonovia, O2 Telefonica Deutschland and Blackstone Property Partners Europe.

Outlook
We will maintain our conservative positioning for the time being. This positioning reflects our concerns about the trend for de-allocation from the credits asset class, the further tapering of the ECB’s CSPP programme later this year and the higher idiosyncratic risks at companies.

Given the material widening of spreads since the start of this year and the steeper spread curves, we can identify a growing number of interesting investment opportunities that we will use to selectively add more risk to the portfolio.
Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Performance per 2018-06-30 (rebased)

No chart data available

Performance per 2018-06-30

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  Fund Benchmark
1 month -0.0 % -0.1 %
3 months -0.1 % -0.3 %
This year -0.5 % -0.7 %
2015 0.0 % -0.7 %
2016 5.1 % 4.7 %
2017 2.4 % 2.4 %
1 year (on annual basis) 1.3 % 1.1 %
3 years (on annual basis) i 2.8 % 2.4 %
5 years (on annual basis) i 3.7 % 3.2 %
Since inception (on annual basis) i 5.6 % 4.5 %
On 20 June 2013, Kempen Euro Credit Fund (KECF) was merged with Kempen (Lux) Euro Credit Fund (the Fund). Up to July 2011 (start of the Fund class I) the performance graph and performance table show the performance of KECF. The average annual TER for the period of April 2008 till June 2013 is 0.92%. Performance is shown after deduction of ongoing charges. The value of your investments may fluctuate. Past performance provides no guarantee for the future.

Dividends

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Distributing
No
Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Maturity profile (2018-06-30)

Fund
Benchmark
22.5 %
3-5 year
27.3 %
22.5 %
0-3 year
24.1 %
20.5 %
5-7 year
20.4 %
18.1 %
7-10 year
20.4 %
14.3 %
> 10 year
7.9 %
2.4 %
Cash
0.0 %
Totaal
100 %
100 %

Sector allocation (2018-06-30)

32.0 %
Banks
16.5 %
Consumer Goods & Services
8.0 %
Telecom & Technology
7.2 %
Utilities
6.3 %
Financial Services & Real estate
5.7 %
Industry
4.7 %
Insurance
4.2 %
Health Care
4.0 %
Supranational
3.7 %
Energy
3.7 %
Other
2.6 %
Basic Materials
1.5 %
Asset Backed Securities
Totaal
100 %
The cash position is included in ‘Other’.

Rating allocation (2018-06-30)

Fund
Benchmark
7.3 %
AAA
0.3 %
6.9 %
AA
5.8 %
35.0 %
A
38.5 %
38.0 %
BBB
55.4 %
5.0 %
BB
0.0 %
5.4 %
Not Rated
0.0 %
2.4 %
Cash
0.0 %
0.0 %
Other
0.0 %
Totaal
100 %
100 %
The rating allocation of the Fund is based on the Bloomberg Composite method. The rating allocation of the benchmark is based on the rating allocation used by provider Markit iBoxx.

Top 10 holdings (2018-06-30)

1.5 %
1.250% KFW 2016-36
1.3 %
0.625% Landwirtsch.Rentenbank 2015-30
1.2 %
0.500% Daimler 2016-19
1.1 %
1.077% BP Capital Markets 2017-25
1.0 %
0.000% KFW 2016-21
0.9 %
1.750% Morgan Stanley 2016-24
0.8 %
1.500% Wells Fargo 2015-22
0.8 %
1.250% ING Bank 2014-19
0.8 %
1.250% CK Hutchison 2016-23
0.7 %
0.875% Apple 2017-25
Totaal
10.0 %
Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Ongoing charges

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Management fee i
0.32 %
Service fee i
0.10 %
Taxe d'abonnement i
0.01 %
Expected ongoing charges i
0,43 %

Other costs

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Upward swing factor i
0.20 %
Downward swing factor i
0.20 %
The swingfactor is applicable if the sum of in and outflow (end trading day) is more than a pre defined percentage ( the so called ‘threshold’) of the fund size. The level of the threshold 1%. As of 1 January 2018 the swing factor has been adjusted from 0.25%/0.25% to 0.20%/0.20%.
Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

Share class details

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Share class
I i
Investor type
Institutional
Distributing
No
Benchmark i
Markit iBoxx Euro Corporates Index
Duration hedged
No
Investment category
Credits
Universum
Credits denominated in euro
Inception date
2011-07-01
Domicile
Luxembourg
May be offered to professional investors only in
Belgium, Finland, France, Germany, Italy, Luxembourg, Sweden, Switzerland, The Netherlands
UCITS status i
Yes
Status
Open-end i
Base currency
EUR
Share class currency
EUR
Management company
Kempen Capital Management N.V.
Custodian
J.P. Morgan Bank Luxembourg S.A.
Morningstar rating â„¢
Morningstar Analyst rating
Silver

Tradability

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Minimum subscription
Initial subscription: €50,000, additional subscriptions: €10,000
Listed
no
Subscription/Redemption Frequency
Daily
ISIN i
LU0630255346
Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.
Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.

KCM Vision

Kempen Capital Management is an asset manager with a long-term investment approach. We strongly believe in engaged shareholdership that benefits all stakeholders. As a long-term responsible investor, we firmly believe that active ownership and shareholder engagement contribute to positive change across the board.

Our KCM wide approach to responsible investment

To put our vision into action we engage with our investment targets on a wide array of strategic, financial, environmental, social and governance (ESG) topics. Our long-term investment worldview paired with thorough analysis and an experienced and diverse ESG team allow us to use both voting and engagement as means to consistently encourage positive change. Through this process of constructive engagement, we are able to contribute to the development of principles and standards of corporate responsibility within companies that we invest in. Our full voting records are available here.

Our fund approach to Responsible Investment

The Kempen credit funds do not invest in companies that are either on the KCM exclusion or avoidance list. The focus in Kempen (Lux) Euro Credit Fund and Kempen (Lux) Euro Credit Fund + lies with the worst performing companies in terms of ESG. Companies that have a MSCI ESG rating ? B (on a scale where AAA is the highest and CCC is the lowest), a fail on the UN Global compact or a red flag on Impact Monitor, are selected for further analysis. Our sector specialist assesses the materiality of the ESG issue and its implications for the credit profile of the company. If an issue is deemed material, our first objective is to engage with the company on the issue. If we can conclude from the engagement that the ESG concerns are not structural and if the company is willing to improve, we make an adjustment in the determination of the relative value of the company's securities. In severe cases where we do not see any prospect of improvement we forego investment in the company.

Kempen (Lux) Euro Credit Fund (the “Sub-Fund”) is a sub-fund of Kempen International Funds SICAV (the “Fund”), domiciled in Luxembourg. This Fund is authorised in Luxembourg and is regulated by the Commission de Surveillance du Secteur Financier. Kempen Capital Management N.V. (KCM) is the management company of the Fund. KCM is authorised as management company and regulated by The Netherlands Authority for the Financial Markets.

Paying agent and representative in Switzerland is RBC Investor Services Bank S.A., Bleicherweg 7, CH-8027 Zurich, Switzerland. The Sub-Fund is registered with The Netherlands Authority for the Financial Markets under the license of the Fund.

The information in this document provides insufficient information for an investment decision. Please read the Key Investor Document and the prospectus. These documents as well as annual report, semi-annual report and the articles of incorporation of the Fund are available free of charge at the registered office of the Fund located at 6H, route de Trèves, L-2633 Senningerberg, Luxembourg, at the offices of the representative in Switzerland and on the website of KCM (www.kempen.com/investmentfunds).

The Sub-Fund is registered for offering in a limited number of countries. The countries where the Sub-Fund is registered can be found on the website. The value of your investment may fluctuate. Past performance provides no guarantee for the future. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units.